NAP Restarting Lac des Iles

North American Palladium (NAP) reported on December. 8, 2009, that it has begun the process of restarting production at its Lac des Iles operations in northwestern Ontario and expects to begin producing concentrates during the second quarter of 2010. Lac des Iles was placed on care and maintenance in October 2008 due to low palladium prices.

Production will be from the mine’s Roby underground zone only. The open-pit, which was being mined prior to the shutdown, will not be reactivated because open-pit reserves were nearing depletion at the time of the shutdown.

The Roby zone will be mined at a rate of 76,500 mt/m over a two-year period, producing about 140,000 oz/y of palladium. During that time, NAP will develop the Offset zone in the underground mine, which is expected to produce 250,000 oz/y over a period of at least 10 years, beginning in 2012.

The Offset zone is a fault-displaced continuation of the Roby mineralization located below and approximately 250 m to the west of the Roby zone. A C$16-million, 1,500-m ramp will be driven over a period of 12 months to reach the zone.

The ramp will provide access for a platform for the installation of a raise-bore shaft to surface, which, in combination with a high-volume bulk mining method, is expected to make NAP a very low-cost-producer of palladium. Planning calls for Offset zone ore to come into production as Roby zone ore is depleted, with no interruption to mine output.

NAP anticipates that mill restart capital expenditures at Lac des Iles will be about C$4 million and capitalized pre-production operating costs will be about C$10 million. Palladium production cash costs per ounce, net of byproduct credits, are expected to be in the range of $335 to $350/oz.